Good morning. I am the director here in brookings but i want to welcome everybody to the event today. How much money for defense is enough . This event began with a call i got from someone i respect he said to me, simply, how do we decide how much money the u. S. Should spend on defense . I know a bit about the federal budget, but i have to confess, im a lot more comfortable talking about things like Social Security, low Income Home Energy assistance programs, the state and local Tax Deduction and about the Defense Budget. So i called michael hamlin, my colleague here, and i put the question to him. How much of the u. S. Spent on defense. Mike said, funny last, i just finished a 20,000 word answer to that question. So here we are. You could read it on her website, but he promised me he wont try to read them all today. I want to start today with a question i can answer. How much the u. S. Spent on defense. The short answer is, we spend a lot on defense. There are lots of ways to measure this, but lets start with a few basics. This is a pie chart that shows how we spent the federal budget in the last fiscal year. We spent about 900 billion on defense, roughly one out of every eight dollars in government spending, 12 of all federal spending. You can see the biggest light that slice of the budget is mandatory spending or entitlements, benefits like Social Security and medicare, and that is a growing part of the federal budget, but that defense slice is pretty big, particularly when compared to the nondefense discretionary budget, which is funding all the things we talk about the federal government does, national parks, grants to state and local governments, and so forth. Even though it is only 12 of the budget, it is pretty big. The department of defense buys more goods, services and software than all other federal Government Agencies combined. The department of defense employs about 2. 2 million people, uniform and civilians. That is substantially more than all the other executive Branch Agencies combined. And something i learned in prepping for this, one third of all civilian federal employees are employed by the department of defense. Of fact, some people say we spend more on defense than the, or as much as the next 10 countries combined, china, russia, india, saudi arabia, uk, germany, and so forth, but mike tells me that calculation may understate how much the chinese spend on defense. They dont have a table to tell us about functional. But another way to look at the Defense Budget is to look at what we spent over history. This is a cbo chart that shows historical funding for defense in real terms, inflation adjusted terms. It shows what cbo projects it will spend based on the department of defense base budget. That greenline is wh congress does. They say we have so much for the base budg, and if we have war like in afghanistan or ukraine, they put that on top so it doesnt get built into the base, although i think it often does. The point here is that you can see that the fence is expected to rise in real terms over the next decade, and treva sharp was one of the speakers today. He said the trend is generally rising and this represents one area of washington policymakers of both parties keep finding ways to agree. In fact, when you listen to the congressional debate, it seems to be, should we spent more or less on nondefense discretionary , or how much more should we spend on defense in real terms. Another way to measure the Defense Budget is to look at it as a share of gdp, how much effort we put into Defense Budget. Of course, the chart looks a little different here. This is defense spending as a shared gdp, it was high during the vietnam war for obvious reason. It is got up and down with wars and is now about 3 of gdp. That is an interesting number, because we keep telling allies they have to spend at least 2 of gdp. Mike will talk about this more in detail. Let me explain to you a little bit about the order of the program today. Mike will give a 15 minute presentation of his paper on this. He is a man of many titles, but most relevant to this one is he is the defensive strategy and director of the center on Security Strategy and technology in the form policy program. He has been here at brookings for nearly 30 years. He is a phd from princeton in public and international affairs. After he speaks, i will be joined on the panel with two other experts on defense spending, a senior fellow at the American Enterprise institute, and a variety of jobs and roles advising the pentagon and members of congress on defense spending. She has a graduate degree in Foreign Service from georgetown. Also, travis sharp, a senior fellow at the center for strategic and budgetary assessment, where he has been for five years. Is also a Lieutenant Commander in the naval reserve. He is that she also has a phd from princeton, and it is and security studies. I will turn the podium over to mike and be back after his presentation. Thank you. Thank you, david, good morning everyone. It is nice to have you here. I will try to spend 15 minutes making the Defense Budget accessible to those of you who dont think about it full time. Also, i will set up a conversation about how much is enough. To quote the famous book from the whiz kids of the 1960s who wrote a book with that title, and of course, david has already captured the ying and yang about how to think about this. On the one hand, the military budget is enormous, almost 1 trillion. That doesnt count veterans benefits. It is account homeland security. It is a lot of money and is substantially more than the cold war average, even after adjusting for inflation. It is substantially more than the peak from the cold war, if you can believe that. On the other hand, as the last chart showed, it is only little more than 3 of gdp. As mackenzie and i were observing a moment ago, 12 of the federal budget is a lot, but it is also a lot less than it used to be. In the early years after world war ii, even after world war ii when we downsize, we were spending about half the federal budget. Half of the budget on the military. It really is entitlements that jumps out at those of us who do defense and Foreign Policy quite often, and probably a lot of human you see that chart as a big enchilada. I come out this from the perspective of a cheap hawk. My papers called how to be cheap talk in the 2020. Those of you who remember Newt Gingrich when he was speaker, after the republicans had taken congress in 1994 and he wanted to downsize government, someone asked him how that squares with you being a hawk, with you being part of the legacy of the reagan revolution and a loyal apostle of president reagan who inherently left office a few years before at that point. Newt gingrich said, i am a cheap hawk. Im not really of the same political persuasion as Newt Gingrich, in general, but on this point, philosophically, i am sort of in the same boat. I would like to talk about how to be a cheap hawk. What im trying to do is spend enough to make sure that at least, based on my analyses, we are in a robust position in a very troubled time in Global Politics with a lot of challenges around the world. And yet, trying to minimize the burden on the taxpayer, and also viewing the overall size of the deficit and the debt as longterm National Security challenges unto themselves. The Defense Department cant solve that problem. Im a little bit concerned about her politics that was come back to the discretionary accounts, socalled discretionary accounts, which are only one third of the federal budget together, defense and domestic. Try to put pressure on those will we leave entitlements alone and essentially leave the revenue issue alone. That wont work. But nonetheless, at a time of fiscal distress and challenge to work countries longterm economic foundations, i do think, for me at least, it is better to be a cheap hawk then to, essentially, bless each and every pentagon request. That is a philosophy i am coming from. When you think about how to build a defense strategy, we should begin with this question. Is part of why david wanted to have this event. He wanted to think from first principles. If youre a generalist thinking about her role in the world and military posture, how do you understand the basic conceptual drivers of an 850 billion Year NationalDefense Program at a military that is not huge by historical standards or even by Current International standards, 1. 3 million active duty, even if you add in all the reservists and guards men and women, were up to about 3 million. That is small compared to the cold war average, small even compared to china today. Does not even that big compared to india or north korea for that matter. It is a defense establish that is fairly small in size, yet being asked to do a lot. What is it being asked to do next let me speak to that question. When you think about building a military strategy and a forced posture, you have to consider who might fight against you, who might fight with you, how many of these kinds of fights or wars you have to be ready for any given moment, and with what degree of readiness and advance. Finally, what does the war look like . What is an adequate margin of insurance or safety in terms of your confidence level that you could win that war. With the ultimate goal, of course, being that we want to deter the war. We want to convince our would be adversaries that is not worth the fight against us. Mackenzie has used this phrase when she talks about preparing for war. We want to be Strong Enough that, if we wind up in conflict, our troops live in the enemy dies. When she says it, it sounds better. With that georgia accent. But the core point for me is that you want to have enough military capability and credibility to fight, that we will prevent the worst from happening in the first place. Were at a point in National Defense strategy were china and russia have become our top concerns for planning. Heaven forbid we actually fight them. We have to now go back to the old line that the purpose of military forces in the future must largely be to prevent war from happening. I duly, that would always be true. But is especially true when you deal with a Nuclear Armed superpower. When you think about general principles for defense planning, who might you fight, against whom, who would fight with you, how many wars at a time and what does the war look like, what margin of insurance or advantage or over match do you seek so the enemy will hopefully not want to fight you in the first place . What i was saying to those of you think we spend too much on the military, what i would submit to you is that we already have a fairly modest and minimal set of standards for how to define the answers to those questions. Ever since the National Defense strategy of 2018 and continue now with secretary alston, were only planning to fight one more at a time. For a long time through the cold war and after, at least we hypothetically envision being able to fight to at a time. The goal was to make sure that if we get involved in one more someplace, no aggressor sees a window of opportunity or weakening of deterrence elsewhere. You want to prevent opportunistic aggressors from seizing on the fact that you are already engaged in one place and attacking you at the same time. That is a nice standard to have gives an extra margin of insurance and also gives you an extra margin in case youre wrong about how many forces would be required to win a given conflict. By the way, we are always wrong about that, because military planning is an imperfect enterprise. Back in the Bush Administration years, that administration thought that defeating Saddam Hussein might take 5 to 10 times as much pain, suffering in american casualties is a dead. Luckily in that case, we exaggerated or overemphasized or over inflated our best prognostications of what the war would look like. The second Bush Administration made exactly the opposite problem. What im trying to convey is not a political point about agendas, it is more a point about military planning. In military planning, if you get even within 25 to 50 of the ballpark of what you think you need to win the war, and that turned out to be validated by events, that is about as accurate as you will be. So they two more capability gives you an extra margin of error. That was a nice thing to have when we could do it when iraq and north korea were the chief concerns. It wound up being harder to defeat even the taliban and isis and al qaeda than we thought. We did not have complete success, even against those much more limited capabilities. Today we plan on being able to defeat either russia or china, not both at the same time. By the way, if we do wind up fighting russia or china, we dont assume that north korea will try to attack at the same moment. We want to maintain limited deterrence against them on the peninsula. Otherwise, not assume additional conflict. Similarly with iran. Were only assuming one bit more at a time as a planning framework for the military. Will have a little bit of a debate in a few minutes about how much is enough to sustain that strategy, but i think it is worth dwelling a little bit on the fact that that is a fairly modest set of planning criteria for what a superpower with 60 allies around the world really needs to have. Also, we have just seen a period of two decades of conflict in which the United States did fight two wars at the same time not a very good job we had to do both simultaneously. Against much lesser foes that we are talking about today. That is the framework. Let me asked my colleague to call up a few slides. I will give you a little bit of background of the Defense Budget and try to race through a couple of additional points before the conversation on stage. This is to remind you of the Historical Perspective of where we are today. We are below the peak of the iraq and afghanistan conflicts in the size of the u. S. Defense budget once you adjust for inflation, but we are well above the cold war. This doesnt really answer any bottom line question, because dollars dont fight dollars on the battlefield, dollars by capabilities that hopefully are adequate to win wars or deter them. That is my first graphic to remind you about where we are. There was a mini build up in the trump years, as you can see. It was shorter than the buildup we have after 9 11 or the buildup we had during the vietnam conflict or the vacant peacetime buildup of the 1980s. Cold war numbers right between 500 billion a year and 750 billion a year. Just to give you a little bit of a sense of the international perspective. David mentioned that, depending on how you count it, we spend more than the next six, eight, 10 countries combined. That is not the ultimate question, but it is worth knowing as a matter of input who is putting resources into their militaries. There is some good news if he put the Defense Budget in global perspective. I know this is a little hard to read. The United States on this graph a couple years ago was spending about 38 of the world total of all expenditures on armed forces. Our nato allies added in another 17 . All of nato combined is 56 of World Military spending. That is good news and bad news. It is good in the sense that we have a lot of rich allies. Were spending a lot on military. Many have not been spending it well and not spending as much as we think they should. And by the way, they all represent obligations, because now we have to have a big enough and Strong EnoughAmerican Military to defend all of them. Is not just their Defense Budgets add to our own, but their territorial protection becomes our burden as well, as if it were american soil. That is what the nato pact really means. I want you to have some sense of resource allocation. We go to the next chart. It will continue this. All the other allies around the world, and another 12 of total World Military spending. The Usled Coalition of nato allies, asian allies, other major security partners, including in the middle east, it represents about 68 of all World Military spending. That should give us confidence that we are in a pretty strong position. But it should not give us any kind of overconfidence for the very reason that most of the conflicts we might fight would be near adversaries own soil. Also, dollars dont fight dollars, you dont have to have a Defense Budget anywhere near the size of the United States and its allies to defeat us. Just asked the taliban. They just won a war with a defense or military budget of their own, probably somewhere in the range of one 1000s of our budget. I want you to see these inputs but not to think they are conclusive analyses or predictions of outcomes in any hypothetical conflict. Just a couple more. We can go fast. This is giving you a sense. Mackenzie and i were talking on the sidelines that the 240 billion estimate of the Chinese Military budget is highly debated and uncertain by plus or 50 . In other words, it can be well into the 300 billion range when you convert. It could be even higher than that. It is somewhere between one third and one half of American Military spending. Easily the seco